When brands within a portfolio begin to underperform, commercial teams face competing priorities, and it becomes increasingly difficult to allocate time, investment, and talent effectively. The immediate response is often to tackle each challenge separately.
Yet these challenges are often symptoms rather than root causes. The real issue may lie at the portfolio level.
Looking across the portfolio, two important questions emerge:
Why do these brands belong together?
Are they collectively creating the maximum value for the business?
When the strategic logic connecting brands is unclear, it is often a sign that the portfolio as a whole is losing focus. One or two brands may still perform well, but the portfolio may no longer be realizing its full strategic and commercial potential.
There can be several reasons why portfolios drift into this state.
Originally, a portfolio may have been designed with a clear strategic rationale, with products working together to make the portfolio stronger than the sum of its parts.
Over time, brands are added to capture new opportunities, while legacy brands often remain even when their strategic relevance has changed. Business units are restructured, leadership teams change, and portfolio priorities shift. For global companies, portfolio decisions made elsewhere can further alter the mix of brands in a market.
Resource allocation habits can also play a role. Some brands continue to receive disproportionate investment simply because "that is how it has always been."
None of these decisions may be wrong individually. But collectively, and over time, they can cause a portfolio to lose focus.
The bigger issue, in my view, is that many companies do not have a systematic approach to creating and managing their portfolios.
We are usually quite good at managing individual brands. We look at their sales, growth, market share, competition, investments and profitability.
But portfolio strategy requires us to do something more.
We need to maximise the potential of each individual brand while ensuring that the portfolio as a whole creates greater value than those brands could create independently.
The brands should not simply sit alongside each other. Where possible, they should complement each other, create synergies and make better use of the company’s capabilities and resources.
That is what can make the whole greater than the sum of its parts.
So how do we make this happen?
1. Have a strong system for portfolio evaluation
Every brand should be evaluated using a consistent framework.
A strong portfolio evaluation framework should assess each brand not only on current performance, but also on future potential, strategic fit, investment requirements, competitive position and its role in the overall portfolio.
The objective is not simply to rank brands. It is to clarify the role each brand should play, where resources should be concentrated, and which brands should be deprioritized or potentially removed.
2. Review the portfolio periodically
A portfolio cannot be evaluated once and then left alone.
Markets change. Brands mature. Competition changes. New opportunities emerge. Business priorities change.
A regular portfolio review, using the same evaluation framework, helps ensure that the portfolio remains aligned with the business strategy.
3. Allocate resources dispassionately
This is perhaps the most important part. Once the portfolio has been evaluated, resources should follow the opportunity and the strategy.
Not simply historical sales. Not because it has always been a priority in the past.
Every brand cannot be a priority.
The objective is to decide where the next rupee of investment, the next sales resource or the next management effort can create the greatest value for the business.
In conclusion, a focused portfolio does not necessarily mean a smaller portfolio.
It means having a portfolio where each brand has a clear role, resources are aligned with opportunity, and the brands collectively create more value for the company. Achieving this requires a robust evaluation framework, regular portfolio reviews, and the discipline to act on the insights they generate.
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At Aovantage, we work with healthcare businesses to evaluate portfolios, identify growth opportunities, and align resources behind the brands that can create the greatest value.